Warehouses have become the preferred cultivation centers for Colorado’s cannabis warehouse industry, and growth of that industry has put a premium on industrial space in Denver.
In Denver, the industrial vacancy rate is currently at 3.1%, which according to brokerage firm Colliers International is the lowest it’s been in decades. The commercial real estate tracking company Xceligent Inc. estimates that the city’s cumulative space used for cannabis cultivation and manufacturing is 4.5 million square feet.
The demand has raised prices. Industrial space in Denver currently rents for $4.74 per square foot on average. That amount represents a 21% increase from 2012, according to Colliers International.
Some cannabis entrepreneurs said that they’ve seen prices as high as $17 to $18 a square foot in some warehouses.
It has also convinced some mainstream property owners to work with cannabis businesses. Brad Calbert, president of the Denver-based wing of Colliers International, said he was initially uneasy about working with cannabis, because “it seemed like a fad.”
“What’s making it sustainable is supply, demand and capital,” Calbert said. “Supply is deficient, demand is excessive and capital is abundant.”